Presto

MUSICAL
TIMES
PRESTO
Established
1881
Established
1884
THE AMERICAN MUSIC TRADE WEEKLY
10 Cents a Copy
CHICAGO, SATURDAY, NOVEMBER 12, 1927
CHAMBER TESTIFIES
ON TAX REGULATION
Its Effect on Legislators Present at Hearing
on Treasury Department Regulations Be-
fore Ways and Means Committee in
Washington Evoke Comment.
THE INSTALMENT PROVISION
Alfred L. Smith Makes Clear to Committee that
Regulations of Treasury Department Keeps Deal-
ers from Advantages of Revenue Act.
The Music Industries Chamber of Commerce is
anxious to hear immediately from (1) merchants who
have received any indication from the Treasury De-
partment of either a reaudit or an additional assess-
ment on income tax reports made under the install-
ment regulations, and (2) from merchants who
changed from the cash or accrual to the installment
basis within five years, or whose first reports made
on the installment basis have yet to be finally audited
by the Treasury Department.
The outlook for a change in the Treasury Depart-
ment regulations which are causing reaudit of tax
reports of many music merchants, with consequent
assessment of large amounts of additional taxes, is
much brighter as a result of the effect of the testi-
mony of the Music Industries Chamber of Com-
merce, presented by Alfred L. Smith, secretary and
general manager, before the Ways and Means Com-
mtitee in Washington on November 3.
Representative Garner of Texas, spokesman on tax-
ation of the Democratic minority, was outspoken in
his denunciation of the numerous changes in regu-
lations by the Treasury Department, resulting in
additional tax assessments being levied. Chairman
William R. Green (Republican) of Iowa also ex-
pressed himself as unable to understand how the
Treasury Department could permit to exist the situa-
tions complained of.
Strong Delegation.
The delegation representing the music industry
consisted of C. J. Roberts of Baltimore and Delbert
L. Loomis, president and secretary respectively of
the National Association of Music Merchants, and
Alfred L. Smith, general manager of the Chamber.
Mr. Smith pointed out to the committee that the
regulations of the Treasury Department made it im-
possible for music dealers to take advantage of the
installment provisions of the Revenue Act without
subjecting themselves to double taxation. A mem-
ber of the committee interrupted to ask if the new
regulations affect only those who elect to take ad-
vantage of the 1926 Act.
"Unfortunately," replied Mr. Smith, "that is not
so. If it were, we would not be so much interested
in it. Of course, we understand that these regula-
tions were designed to fit the peculiar necessities of
the installment business, and a great many of our
dealers think that it is to their advantage, and they
would like to elect to report on this installment basis;
but, obviously, they cannot do it.
The Double Taxation.
"I do not know of any case in which they could
afford to do it, in view of this double taxation. It is
bad enough to be deprived of what we thought were
the benefits of this provision, but that is not the real
serious thing from our standpoint. The seriousness
of the situation arises from the fact that for a, num-
ber of years these taxpayers have been reporting their
income on this installment basis, doing it in good
faith, doing it in accordance with the regulations
which allowed them to make this deduction and upon
which there was no double taxation.
"If they had ever dreamed that they would be
faced with the present situation I am sure that few,
if any, would ever have made the change. All of
those who made the change, except those on whose
returns the statute of limitations has operated, are
faced with a reaudit by the Treasury Department
and a demand for very substantial additional tax
assessments."
Representative's Opinion.
Representative Garner, who had been listening in-
tently to Mr. Smith's complaint, was visibly im-
pressed. "I have been a member of the Ways and
Means Committee for ten or twelve years, but this
is the first hearing referring to the changes of regula-
tions by the Treasury Department. But when the
department overrules itself three times a year on one
law it looks as though something is wrong some-
where, either because of inefficiency or lack of proper
directions in the original instance. 1 merely want to
make that statement for the record, because I hope
that the Treasury Department will be able to give
us some light on it when it comes to consult with
the committee in executive session."
The Treasury Department has maintained that its
new regulations which cause double taxation are re-
quired by Congress because of a specific reference
made to certain former regulations when the Revenue
Bill was before Congress. The Chamber maintains
that Congress did not intend to make the reference
in question, but really intended that the satisfactory
regulations then in effect should be continued.
Representative Chinbloom, Republican, of Chicago,
after having heard the testimony of the Chamber,
stated that he believed the reference by Congress
to the regulations promulgated December 29, 1919,
was inadvertent, as maintained by the Chamber, and
indicated that if that was the cause of the present
difficulty, then Congress should remedy the situation.
Special Recommendation
The committee was desirous of a specific recom-
mendation concerning amendment of the Act, and
Mr. Smith proposed that the provision of the Treas-
ury Department regulations in effect at the time of
the passage of the 1926 Act, and which eliminated
this double taxation feature, should be inserted spe-
cifically in the Revenue Act. He suggested the fol-
lowing insertion after the first paragraph of Section
212, subdivision (d): "After a change has been
made from the cash or accrual basis, no part of any
installment payment received subsequent to the
change, representing income previously reported on
account of such transaction, should be reported as
income for the year in which the installment payment
is received."
In addition to the presentation of the Chamber
on Thursday, the installment situation was discussed
by representatives of the National Association of
Real Estate Boards. The real estate people are in-
terested especialy in changing the provisions which
discriminate against sellers of real estate on install-
ment.
Demand on Dealers
Quite a number of music dealers are already known
to have received demand for additional taxes from
the Treasury Department as a result of their tax
reports of previous years being reaudited in accord-
ance with the new installment regulations. If Con-
gress; fails to aake action causing the Treasury De-
partment to change its regulations, it is expected
that all of the installment tax reports of the music
industry, except those upon which the statute of lim-
itations has run, will be reaudited, and in most cases
substantial additional taxes levied. The amount of
these additional levies, as indicated by those already
received by certain dealers will certainly be huge, not
only in aggregate, but individually.
The Ways and Means Committee is holding hear-
ings in advance of the opening of Congress in order
to be able to report a new tax bill as soon as Con-
gress does open, so that action by both the Senate
and the House can be taken in time for the new
Revenue Act to govern the reporting of taxes for
the fiscal year 1927.
SUCCESSFUL TRIP FOR KRAKAUER.
Arthur Ilahn, treasurer of Krakauer Bros., New
York, who has had a pleasant and successful trip
through the Pacific Coast states, stopped a day or
two in Chicago this week on his way home to visit
the Ralph B. Waite Piano Company, 218 South
Wabash avenue, Chicago representatives of the Kra-
kauer instruments. Mr. Hahn is optimistic about the
pian4 trade outlook for the present season, and he
found Mr. Waite in the same mood, both men being
alert to get their share of the business.
$2 The Year
MUSIC TRADE NEWS
FROM WISCONSIN POINTS
Five Thousand Enrolled in Melody Way Club
in Milwaukee—Mathushek Agency for
Green Bay Firm—Other News.
Over 9,000 pupils have already enrolled in the Mil-
waukee Journal Melody Way Club giving free piano
lessons at home which have been written by W. Otto
Miessner. Neither the boundaries of Wisconsin or
the United States are the boundaries of the club, for
a recent application for membership was received
from West Africa.
At Green Bay, Wis., the Vandenberg Music Co. is
staging a remodeling sale in order to reduce its stock
so as to permit alterations to the store at 118 North
Washington street.
G. G. Schneider, the piano man of Green Bay, has
been named as the exclusive Mathushek piano rep-
resentative for the entire Northeastern and Northern
Wisconsin, including the Fox River Valley. During
November and December he is making a special offer
of one year's music lessons by a competent teacher
free with every piano purchased during that time.
The Uptown Music Shoppe has been opened in
Milwaukee at 820 48th street to deal in radios and
musical instruments. One hundred shares of com-
mon stock at $10 each have been subscribed. Sign-
ers of the articles of incorporation are Charles E.
Kelly, Joseph W. Rothermel, and G. C. Hoffmann.
This week marked the formal opening of the Tem-
ple Music Company's new quarters at Green Bay.
Many people visited the new music rooms of the com-
pany, which are said to be the most beautiful in this
part of the country. Frank Van Den Berg is presi-
dent of the company, which handles Steinway & Sons
pianos, Jesse French & Sons, Everett, Hallet & Davis
and Cable pianos, besides the Brunswick Panatropes.
A. Stiller, Jr., is treasurer of the company and Ruth
Nichols and Mary Margaret Quigley are in charge of
the sheet music and record departments.
FIFTEEN HUNDRED DOLLAR
PIANO BALTIMORE PRIZE
Champion Player to Be Decided at Finals at Lyric
Theater Before Large Assembly.
Two hundred boys and girls known as School
Champions have been selected in a competition of
more than 3,000 children as winners of the prelim-
inary tests of the Greater Baltimore Piano Playing
Contest sponsored and held under auspices of the
Music Trades Association of Baltimore. The school
champions, which represent the elementary, inter-
mediate and high school grades, have each been
awarded a silver ring. They will now compete in
the semi-finals. The winners of the semi-finals will
receive gold rings.
The committee in charge of the contest is now
engaged in the work of preparing the semi-finals.
The winners from each of the elementary and inter-
mediate schools will now compete for sectional hon-
ors. The city has been divided in four sections and
one winner of each of the two divisions will be
selected. To these winners will go the gold rings
which also carry with them the right to participate
in the finals for the championship of the city. The
finals will be held at the Lyric Theater, and will be
attended by Albert C. Ritchie, governor of Maryland;
William F. Broening, mayor of Baltimore, and many
other state and city officials, as well as noted musi-
cians, composers and piano merchants of this city.
The major prizes for the contest are a $1,500 grand
piano to the high school champion, an $800 instru-
ment to the intermediate champion, and a $400 piano
to the elementary champion. Diamond rings will
be awarded to other children who compete in the
finals, while each child who has played in at least
one test will receive a certificate of merit.
The Conn Baltimore Company, Inc., 406 North
Howard street, has introduced a new feature in con-
nection with the sale of its instruments. That is the
free offer of lessons on all Conn saxophones pur-
chased from the store beginning with November 1.
Enhanced content © 2008-2009 and presented by MBSI - The Musical Box Society International (www.mbsi.org) and the International Arcade Museum (www.arcade-museum.com).
All Rights Reserved. Digitized from the archives of the MBSI with support from NAMM - The International Music Products Association (www.namm.org).
Additional enhancement, optimization, and distribution by the International Arcade Museum. An extensive collection of Presto can be found online at http://www.arcade-museum.com/library/